Losing Money Every Month: Growing Finance Crisis Threatens Affordable Housing, Challenges Mamdani

Yves here. I don’t pretend to have answers to the problem of aged affordable apartments becoming financial sinkholes by (among other reasons) encountering pro-tenant policies that make it take a long time to evict non-payers and re-rent vacant spaces. But keep in mind that THE CITY is very much oriented towards the issues of ordinary New Yorkers, covering abuses at Rikers, by ICE, and organizing by deliveristas. The landlord at the center of this account is trying to make the equation of affordable housing work and is coming up against a wall.

Some of these issues are particular to New York City, but are also ones Mamdani will have to contend with in his broader push to get rental costs down. More apartments designed for middle and lower income renters is the only viable longer-term fix. But getting that going takes time, and more than one mayoral term to have any impact.

By Greg David. Originally published at THE CITY on November 19, 2025

BronxProGroup manages 93 subsidized apartment buildings containing more than 3,300 affordable apartments, mostly in The Bronx.

One in three units are in buildings where this year expenses are greater than the rents collected. And one in five are in buildings in such poor financial shape that the owners will have to resort to renegotiate their loans to lower their risk of defaulting.

CEO Samantha Magistro, who joined the family-owned firm about 25 years ago, says half of the units are in buildings that no longer can make any payments to their owners.

The business of running this kind of housing, increasingly, isn’t a viable one.

These buildings are not only rent regulated, but were also built with requirements that the apartments be leased at very low rents to people with very specific low incomes. Since the pandemic, their costs have risen a lot, their rent increases have lagged badly, and rent collections have slipped. Owners and managers say Mayor-elect Zohran Mamdan’s promise of an at least four-year rent freeze will make their situation worse.

“My father, who founded the company’s parent decades ago, would tell you things were worse in the 1970s,” the 43-year-old said, when areas of the Bronx saw widespread arson and abandonment. “But for my generation this is the hardest it has ever been.”

Magistro’s story is being repeated throughout New York City in this crucial sector of the city’s housing stock, according to two new reports on the all-affordable housing sector released last month, estimated to include about 300,000 units.

For the tenants in those buildings, this is the only housing they can afford. Without some change in course, possible future scenarios are grim: If housing stock deteriorates, or buildings are abandoned by owners, or investors are unwilling to put their money into affordable housing because the numbers don’t add up, the city’s affordability crisis will get even worse.

“What our report demonstrated is that financial strain in our affordable housing stock is not limited to a few owners, or specific geographies, or building types,” said Patrick Boyle, senior policy director at Enterprise Community Partners, an organization that helps arrange housing financing and works with BronxProGroup. “It’s widespread, and as advocates and policymakers, we urgently need to turn our attention to preservation.”

The search is on for solutions.

“There is no one easy fix,” Boyle added. “Increasing resources like rental assistance, reducing regulatory barriers and tackling expenses head-on will all be required.”

These all-affordable projects are built under agreements with either the city or state that dictate who can rent the units by income. Most are financed in part by low income housing tax credits. Industry experts estimate that about half are built and run by non-profits and the other half by for-profit developers like BronxProGroup, which specialize in this area.

Many of them rely on other forms of subsidy like federal or city vouchers to make their numbers work. Those programs tie rents to a fraction of the household incomes of tenants and pay property owners the difference.

About six in 10 affordable projects that have received financing help from Enterprise and the National Equity Fund have expenses that exceed their income, according to a report the group issued last month. Those projects have seen their expenses increase 40% since 2017, far more than the increases in rents allowed by the city’s Rent Guidelines Board, which sets rent levels for regulated apartments.

The Association for Neighborhood and Housing Development, a coalition of community groups including nonprofit affordable housing organizations, found that about half of the all-affordable buildings it studied — containing 112,000 apartments — are losing money.

Previously, discussion of the plight of landlords has centered on owners of older buildings whose units are almost entirely rent regulated and whose finances have been badly hurt by 2019 changes in the rent laws. A key change effectively ended the ability of landlords to renovate vacant apartments and then charge a much higher rent, which helped them keep up with cost increases even when regulated rent increases for existing tenants were zero. (Rent freezes for regulated units happened three times during the de Blasio administration, in 2015, 2016 and 2020.)

This has led to a crisis for older buildings where virtually all the apartments remain rent regulated, which has been detailed by the Furman Center and stories in THE CITY.

Tenant advocates focus on the role of speculators who bought rent-regulated buildings at inflated prices assuming they would raise the rents dramatically over time.

But BronxProGroup’s affordable buildings never saw that kind of speculation and illustrate how the financials of a much broader group of buildings are increasingly untenable.

“They are a great example of a family-owned and operated business who are doing this because they believe we need more affordable housing in the city,” said Carlina Rivera, a former Council member from Lower Manhattan who is now chief executive of the New York State Association for Affordable Housing, which works with for-profit developers. “And they are telling you they are barely breaking even.”

The Enterprise study found that collections for the buildings it studied now equal only 90% of the expected rent, down from about 95% before the pandemic. These buildings were financed with the assumption that collections would be 95%.

“I call them workouts because I can’t afford my expenses and my mortgages even at 95%,” said Magistro. Prior to 2019, she was collecting 98%. This year she is collecting 93% which is higher than in 2022 and 2023.

Both Enterprise and ANHD zeroed in on increases in the cost of insurance, utilities and maintenance as the second major part of the problem.

Magistro’s insurance costs, which have gone up the most in The Bronx where her portfolio is concentrated, have jumped from $600 a unit annually to $1,600 since 2019.

Another key issue for her is paying overtime to staff, in part as a result of changes to trash collection rules that now force building workers to put out the garbage at night.

Both Enterprise and ANHD note that when building finances are strained, landlords have no choice but to defer maintenance, which leads to a deterioration of the housing stock.

Magistro this year laid off 10 staffers reducing her workforce to 143.

One of her buildings shows how the factors undermine a buildings’ finances.

She is collecting only 81% of the possible rent at a 30-unit building at Mapes Avenue in the Bronx, built in 2021. Her insurance has almost doubled since the building opened to $2,500 annually. She will need an infusion of cash to reduce the mortgage if the building is to operate for the long term and avoid default.

“Small projects have little resiliency to economic shocks like a spike in insurance,” she said.

Mayor-elect Mamdani has promised to help landlords reduce their costs to cope with his planned rent freeze. One key target will be reform of the city’s property tax system, which levies the highest taxes on rental buildings.

However, most of the all-affordable projects don’t pay property taxes. And other mayors have tried and failed to make headway on property tax reform, a thorny and complicated issue that needs Albany’s involvement to get done.

He also says he will make changes to the bureaucracy that will help. Magistro notes that when one of her apartments becomes vacant, it takes an average of five months for the city to approve a new tenant if a city subsidy is involved, which costs her lost rent for that period. Eviction of a tenant who is not paying their rent averages 12 to 16 months to conclude, in large part because of the sluggish workings of Housing Court.

ANHD wants the state to establish a fund for forgivable loans to help stabilize the finances of these buildings, increase voucher and other rental assistance programs, have the state intervene in the insurance markets to lower costs and provide new financing to help with rehabilitation programs.

Enterprise also calls for emergency funding, more rental assistance and actions to reduce insurance costs. It also wants sped up leasing for vacancies. Enterprise says in its report that solutions “cannot come on the backs of renters.”

Magistro can’t count on any of that now that property management is at best break-even. So she’s crafted a five-year plan in which her company will seek to increase its role as a developer, using the development fees she receives to keep the company afloat.

And with so much talk about the need to build new housing to solve the city’s housing crisis, she has a plea to Mamdani and other officials about their priorities and how to view landlords like her.

“There was a lot of work in previous decades to create and it is important to remain it stays financially feasible and it is important for the city to keep it affordable and preserved.” she said.

And she added, “Yes I am a developer and a landlord but I see myself as an employer,” she said. “I live in New York City. I choose to be in business in The Bronx. My office is in The Bronx. Seventy percent of the people I employ are from The Bronx. That’s part of the story, too.”